Regulators found that Character Technologies failed to provide clear information about how user data is processed and raised concerns about safeguards for minors and the effectiveness of age-verification procedures.

The Garante flagged delays by Character Technologies in conducting a Data Protection Impact Assessment and in appointing an EU representative.

Additional protections beyond the existing measures were deemed necessary to guard underage users.

Regulatory scrutiny of AI services is rising in Europe, with fines and evolving expectations shaping how these services operate.

The Garante presents itself as a proactive AI regulator in Europe, referencing its 2023 temporary ban on OpenAI’s ChatGPT over age-check and data-collection issues.

The case reflects a broader EU trend of tightening oversight on AI platforms, mirroring past actions like the ChatGPT suspension in Italy in 2023.

Italy’s data protection authority fined Character Technologies €158,000 for data protection breaches, including failures in age verification and protecting younger users.

The fine highlights GDPR expectations for clear privacy notices and timely DPIAs as part of compliance.

The penalties underscore GDPR compliance expectations, including timely DPIAs and transparent privacy disclosures.

Regulators are increasingly scrutinizing generative AI platforms for safeguarding personal data and ensuring robust age verification as AI adoption grows.

European authorities are pursuing a multi-faceted regulatory approach—privacy, consumer protection, digital markets, and AI governance rules—to oversee AI providers.

The service enables chats with AI-generated virtual characters, including minors, raising concerns about youth data handling and the adequacy of safeguards.